5 Places To Work Remotely That Aren’t In Your Apartment

Trains, local parks and even bars can all double as workspaces.

If you haven’t noticed, the world beyond your window has recently acquired a sheen of normalcy not experienced since the halcyon days of early-2020. Go roll your eyes at “The Batman” and you’re bound to scarf popcorn astride a legion of maskless neighbors. Head to your neighborhood dive, and you’re liable to recognize a few people by face, some of whom you literally haven’t seen in decades, or at least since mid-2021. It’s truly wild, this dance with nostalgia.

And yet.

And yet more than a few things (remember menus?) won’t revert to their pre-COVID ways any time soon, particularly those in which we work. For folks with the means and inclination to clock in via laptop, the benefits of remote work — no commute and greater flexibility to perform one’s professional and/or parental obligations — have been widely reported. Conventional wisdom suggests our new definition of work/life balance will long outlive the pandemic.

That’s why we thought we’d compile a brief list of places to work remotely to power you through the rest of 2022. If variety really is the spice of life, you’d be well-served to refresh your office setting every now and again.

1. Coffee shops

Coffee shop is a traditional place to work remotely.Coffee shop is a traditional place to work remotely.

Let’s go ahead and get the obvious choice out of the way. After all, it’s more than plausible that every (sane) person you know loves a good coffee shop. Many cafés have the decency to open far too early, which lets us delude ourselves with thoughts of getting an early start tomorrow morning.

They also — duh — serve pastries and other savory breakfast staples. Some even sell doughnuts. And then, of course, there’s the reason we bother in the first place, the perennially-necessary caffeine itself, a drug not merely sanctioned but beloved, and the very fuel which makes possible the nascent growth in WFH policies. Combine these elements and you have a near-perfect work environment.

2. Bars and breweries

Brewery

Brewery

Here in Portland, you can’t pass a Heart Coffee or retail weed shop without also passing a brewery. It’s honestly one of the most compelling reasons to move here (not that all of us are suggesting you do so). What folks may not know is that beyond offering a rotating list of delectable concoctions and locally-hopped collabs, a good brewery makes a stellar office.

Think about it. Breweries gift us with spaciously-placed water stations and a variety of pub food, not to mention an array of long wooden tables and reliable Wi-Fi (often with kitschy network names!). Although unique, it’s definitely one of the best places to work remotely. Trust us: a laborer in modern-day America could do far worse than whichever brewery is nearest their home.

3. Parks

Picture of the woods, a great place to work remotely.

Picture of the woods, a great place to work remotely.

OK, hear us out on this one. Yes, the Wi-Fi in your local park is usually atrocious (and often non-existent). And sure, you’re not going to finish that project from atop whichever tree stump just ripped your shoelace, causing you to collapse in an awkward, moss-strewn heap. But before you dismiss the idea that these saintly spaces can, and often do, double as places of productivity, remember what you are likely to accomplish with a traipse through a public wood.

Our guess is that you’ll find inspiration in all that clean oxygen circling your senses, a little motivation tucked beneath the varied scents and burrows bordering your every step. Writers much smarter than yours truly have educated us on the many cognitive benefits of walking outside. We take them at your word, which is why this article was written (i.e., dictated) in a narrow tree hollow somewhere in Forest Park (pictured above).

4. Planes, trains and…well, just those two

Working on a train

Working on a trainLate last year, while in the throes of some such variant, I discovered that trains and airplanes are fine places to conduct business, so long as the project entails light, ideally Internet-free work. Experience has proven that railway travel through the countryside doesn’t provide the most reliable signals.

Except for the world whirring beyond or beneath your window, there’s little to distract you while working aboard a train or plane. Unwanted conversations are easily avoided thanks to handy pair of noise-canceling headphones. The fold-out trays in front of your seat double as effective enough desks, providing you don’t bend them to the other side of their limits. Plus, the overhead light helps those COVID-weary eyes better identify the maddening number of typos littering your work. With snacks at your service and multiple bathrooms in either direction, you may find that your best workdays are those spent barreling across or above the country.

5. Libraries and bookstores

Working in a library is a great place to work remotely.

Working in a library is a great place to work remotely.

Libraries and bookstores are an excellent choice for those looking for a new work environment. And they’re quieter than their coffee shop brethren. The Wi-Fi is strong and almost always free. In either case, one has at their disposal an immense collection of hard copy productivity boosters (i.e., books). On those rare days in which you feel like socializing with a coworker in person, it’s more than likely that your local library offers private conference rooms to help you brainstorm (i.e., doom-scroll and catch up).

If you go the bookstore route, it’s a safe bet you’ll have an espresso bar on site. One that may even feature a light collection of sugary treats and an unsettling amount of bottled kombucha. All of which is to say, one simply can’t go wrong when hauling their laptop to a library or bookstore. Within the comfy confines of a space dedicated to learning and curiosity, one immediately feels calmer, smarter and far more responsible than one might when working in, say, a bar or brewery (not that there’s anything wrong with that).

You do you

Daily life is shifting back into a gear we sort of, kind of recognize, but many things remain forever changed. If you’re one of those people who have no problem brandishing the term “digital nomad” in public, it’s time to embrace our new reality and find new places to work remotely. Much like the world beyond your laptop, this new work/life paradigm is your oyster. Go forth and Slack.

Source: rent.com

Stock Market Today: Stocks Suffer Worst Losses of 2022

The major indexes wiped out yesterday’s relief-rally gains and then some Thursday in a market-wide rout as Wall Street took a more sober look at the investing landscape.

For one, most of the worries hanging over stocks haven’t disappeared, including on the interest-rate front. While Federal Reserve Chair Jerome Powell did dismiss the idea of a 75-basis-point hike yesterday, the expectation is for at least two more 50-basis-point hikes at the next two Federal Open Market Committee meetings – a still-considerable level of monetary tightening.

“We are still not out of the woods yet, as there is still too much uncertainty over how the Federal Reserve’s actions will tame inflation without causing a recession,” says Zach Stein, chief investment officer of climate change-focused investment manager Carbon Collective.

Indeed, the yield on the 10-year Treasury, which retreated yesterday, roared back to life Thursday to eclipse 3% once more. That weighed particularly hard on rate-sensitive growth places in tech and tech-esque stocks such as mega-caps Tesla (TSLA, -8.3%), Nvidia (NVDA, -7.3%) and Apple (AAPL, -5.6%).

Speculative assets such as cryptocurrency went heavily risk-off, too; Bitcoin, for instance, plunged 8.9% to $36,287. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)

Gene Goldman, chief investment officer of Cetera Investment Management, pointed to additional drivers for Thursday’s woes.

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“There is less optimism around the less hawkish Fed and the softish landing scenario,” he says. “We saw data this morning portraying more inflation and a weaker economy – labor costs surged in Q1, unemployment claims rose, and productivity was weaker than expected.”

Goldman also pointed to disappointing earnings reports from the e-commerce industry, which, because of high valuations to boot, were selling off particularly hard.

Shopify (SHOP), for one, plunged 14.9% after the e-commerce company reported lower-than-expected adjusted earnings and revenue in its first quarter (20 cents vs. 63 cents est.; $1.2 billion vs. $1.24 billion est.) and projected soft revenue guidance in the first half amid tough comparisons. SHOP also said it will buy San Francisco-based fulfillment startup Deliverr for $2.1 billion.

“Although e-commerce growth was below our view, SHOP is lapping pandemic figures, with comparisons to get more favorable exiting the calendar year,” says CFRA Research analyst Angelo Zino (Hold). “That said, we do think consensus expectations will need to be tempered, partly reflecting lower than expected merchant additions to start the year.”

eBay (EBAY, -11.7%) spiraled lower despite topping first-quarter estimates after it forecast second-quarter revenues of $2.35 billion to $2.40 billion and adjusted earnings of 87 to 91 cents per share, both under expectations for $2.54 billion and $1.01 per share, respectively. Etsy (ETSY, -16.8%), meanwhile, slightly beat revenue expectations but was merely in-line on profits and forecast Q2 sales of $540 million to $590 million, falling far short of the $627 million analyst mark. Amazon.com (AMZN) bled 7.6% in sympathy.

The result was the worst single-session performance of 2022 for both the Nasdaq Composite (-5.0% to 12,317) and Dow Jones Industrial Average (-3.1% to 32,997), while the S&P 500 (-3.6% to 4,146) was just a hair shy of outdoing its marginally larger decline April 29.

stock chart for 050522stock chart for 050522

How low could we go from here?

Well, a bear market (a 20% drop from highs) would mean about 3,850 for the S&P 500, and John Lynch, chief investment officer for Comerica Wealth Management, thinks the index could scrape that figure.

“Bear markets without recession tend to be short and shallow,” Lynch says. “It’s conceivable the S&P 500 needs to establish a bottom in this 3,850 to 4,000 range. Without recession in 2022, which is our base case, stocks can resume higher as equity investors discount cyclical recovery in an environment where monetary policy is no longer shepherding expensive growth and technology names at a multiple of sales.”

Other news in the stock market today:

  • The small-cap Russell 2000 dropped 4.0% to 1,871.
  • U.S. crude oil futures eduged up 0.4% to settle at $1081.26 per barrel.
  • Gold futures gained 0.3% to finish at $1,875.70 an ounce.
  • Booking Holdings (BKNG) was a rare splash of green today, adding 3.3% after the online travel company reported earnings. In its first quarter, BKNG reported earnings of $3.90 per share on $2.7 billion in revenue, more than the 85 cents per share and $2.5 billion analysts were expecting. The company also posted gross bookings of $27.3 billion, a record quarterly amount. “We have a favorable view of online travel companies, and particularly of BKNG given its focus on Europe, where it generates most of its gross profit,” says Argus Research analyst John Staszak (Buy). “BKNG is trading at a projected 2022 price-to-earnings ratio of 20.2, below the average for other online booking companies; however, we believe that it merits a higher multiple given the company’s strong earnings outlook.”

Warren Buffett Splashes More Cash

Warren Buffett is spending like there’s no tomorrow. A Wednesday evening regulatory filing from Berkshire Hathaway (BRK.B, -2.5%) revealed that the Oracle of Omaha’s holding company bought $350 million shares in energy firm Occidental Petroleum (OXY, +1.2%). 

The Berkshire Hathaway equity portfolio has plumped up on Occidental exposure in recent months – Buffett revealed a nearly 10% OXY stake in early March that now sits at 15.2%, and he also owns $10 billion worth of 8% preferred stock, as well as 84 million warrants to purchase OXY stock. The move is part of Buffett’s renewed buying interest in energy that has seen Chevron (CVX) become Berkshire’s fourth-largest holding.

All of this falls under an even larger underlying theme, which is that Buffett has gone from being a voracious seller in 2021 to buying everything that isn’t tied down this year. Part of that seems to be the Oracle taking advantage of a considerable dip in the market. But a closer look at what Buffett’s buying signals that he, like the rest of us, has rapidly rising prices on the brain.

We recently talked to noted Buffett expert David Kass about the Berkshire CEO’s recent binge, and how much of Warren Buffett’s activity has been connected to inflation.

Source: kiplinger.com

Gross Domestic Product (GDP) – What Is This Economic Indicator?

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Additional Resources

Gross domestic product (GDP) is one of the most commonly used measures of economic production in the world. Despite its popularity, many people don’t know exactly what GDP is, how to calculate it, or how it affects you.

Put simply, GDP is the total value of everything produced by an economy, typically a country, over a period, typically one year. This allows economists to compare the size of different economies. In general, the higher a country’s GDP, the stronger its economy.

GDP can be important for everyday people for a number of reasons.


What Is Gross Domestic Product (GDP)?

GDP is a measure of the total market value of everything an economy produces. That includes both physical goods as well as intellectual property and services produced by an economy. GDP is typically measured over the course of a quarter or year and based on political borders, such as for countries or states.


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You can think of GDP as being like a report card or scoreboard for the health of an economy. If a country’s GDP is rising, it means its economy is becoming more productive. If GDP is shrinking, its economy is becoming less productive. You can compare the size of two countries’ GDP to compare the output of their economies.

There are multiple ways to calculate GDP but they all aim to produce a similar result: a measure of the size of an economy.


Factors That Affect GDP

Because GDP measures the size of a country’s economy, it is influenced by numerous economic factors.

GDP is the sum of the market value of everything an economy produces. The more valuable goods and services an economy produces, the higher its GDP will be. Keep in mind, GDP is a measure of the current value of goods and services. If inflation causes prices to rise, a country’s GDP will also rise because goods are more expensive.

The primary way economists determine the value of goods produced by an economy is to add all government spending, personal consumption, private investing, and net exports. 

The more the government spends, the more private businesses and people invest, and the more consumers spend, the higher a country’s GDP will be. Exporting more than it imports will also increase a country’s GDP, whereas importing more than it exports will reduce its GDP.


Types of Gross Domestic Product

GDP is used in multiple different contexts. Economists have designed different types of GDP to help them measure different aspects of the economy.

Nominal GDP

Nominal GDP is one of the most common measures of gross domestic product. It is the value of all goods and services an economy produces using current prices, unadjusted for inflation. This means it is less useful for comparing the same economy across different years because inflation can cause GDP to rise due to price increases, even if an economy’s output does not change. 

However, it is useful for measuring output in current terms and is often the simplest to calculate because you don’t have to adjust for inflation.

Real GDP

Real GDP is an inflation-adjusted measure of gross domestic product. It measures the output of an economy using constant prices.

For example, imagine an economy that produces $1,000 worth of goods in a year. The next year, it produces the exact same goods, but those goods sell for $1,050 because inflation for the year is 5%. 

The real GDP in both years will be the same because real GDP adjusts for inflation using the value of the economy’s currency in the base year to determine the GDP for future years.

For real GDP to increase, the output of an economy must increase rather than prices increasing due to inflation.

This makes real GDP useful for comparing changes in the same economy over time or comparing growth in different countries’ GDPs over time.

GDP Per Capita

GDP per capita is a measure of economic production per population. GDP per capita can be expressed in multiple forms, including nominal, real, and purchasing power parity.

Determining GDP per capita requires calculating an economy’s GDP then dividing it by the economy’s population.

For example, if an economy has a GDP of $10 million and a population of 2,000 people, its GDP per capita is: $10 million ÷ 2,000 = $5,000 per capita.

GDP Growth Rate

GDP growth rate measures economic growth over time. Usually, economists measure this on a quarterly or annual basis. This is typically expressed as a percentage rate.

For example, if an economy’s GDP is $10 million in one year and $10.5 million the next, its GDP growth rate is 5%.

GDP growth rate is a popular measure for economists for a few reasons. One is that it can help economists see the speed of an economy’s expansion or contraction. An economy that is growing too quickly may lead to inflation and prompt central banks to raise interest rates. If growth slows, the economy might be heading toward recession, prompting policymakers to attempt to bolster the economy.

A negative GDP growth rate indicates an economy that is shrinking or in recession.

GDP Purchasing Power Parity (PPP)

Purchasing power parity is a measure of the different standards of living between economies. It analyzes the price of a “basket of goods” that contains different common products and services people purchase. Higher PPP indicates a more powerful currency that can purchase more goods or a higher standard of living.

GDP PPP adjusts an economy’s GDP for exchange rates and the purchasing power of its currency compared to other currencies, letting economists compare the output of an economy to its cost of living.


How GDP Is Calculated

There are multiple different ways to calculate GDP but they all aim to measure an economy’s output. Each formula tries to account for the same factors, just in different ways. 

There are three methods economists use to calculate economic activity and determine GDP.

Expenditure Approach

The expenditure approach looks to determine the GDP of an economy by finding the total of all spending in that economy. The idea is that all of an economy’s outputs are purchased by someone, so finding out how much money is spent by individuals, businesses, and the government will tell you the value of all the goods an economy produces during a period of time.

To find GDP using the expenditure approach, you can use this formula:

Consumption + Investment + Government Exports + Net Exports = GDP

Consumption refers to consumer spending on items like food, rent, gas, clothing, and any other goods and services that they might need. It does not include capital investments like equipment, machinery, or real estate.

Investment is the portion of the calculation that accounts for investment in equipment, land, machinery, and the like by both individuals and businesses. It doesn’t include investment in financial products like stocks, bonds, or mutual funds.

Government spending is the aggregate of all the money the government spends on goods and services, including government employee pay, military spending, and infrastructure. Things like Social Security benefits aren’t included because they are transfer payments — a reallocation of money from one group to another. Unemployment, subsidies, and welfare are similarly excluded.

Finally, net exports measures the value of all goods an economy exports minus the value of the goods it imports. A country that exports more than it imports will have a positive value for net exports, whereas one that imports more will have to subtract the difference when finding its GDP.

The drawback of the expenditure approach is that it ignores some forms of investment, such as putting money in savings accounts or buying stocks. It also values goods and services at the price the purchaser pays, even if they pay a heavily discounted price below the true value of that good or service or an inflated price above its true value.

Production (Output) Approach

The production, or output, approach to calculating GDP uses the value of all the final goods that an economy produces. Here’s how this method of calculating GDP looks:

Gross Value Added – Intermediate Consumption = Value of Output (GDP)

  • Gross Value Added. How much value different economic activities add to goods and services.
  • Intermediate Consumption. The cost of the supplies and labor used to produce finished goods and services.
  • Value of Output. This calculation gives you the GDP of an economy by subtracting intermediate consumption from the gross value of an economy.

The drawback of using this approach is that it is nearly impossible to determine the true amount of production in an economy or the true value of that production. Some services are difficult to measure monetarily and may not wind up in the calculation, even though they have a major impact on the economy.

For example, someone who babysits children for a family probably won’t show up in this calculation. However, their babysitting lets the parents go out and spend money at restaurants, movie theaters, or other businesses.

People who produce goods at home, especially those who don’t sell them, also won’t have their production included, even though goods like home-grown vegetables have real value that should be included in GDP.

Finally, this method fails to account for the underground economy, which is not reported to the government. Services performed under the table — those done outside of the formal economy through barter or cash payments that aren’t reported to tax authorities — are excluded even though they add value to the economy.

Income Approach

The income approach to determining GDP looks at all the money individuals and businesses in an economy earn. To find GDP using this method, you can use the following formula:

Wages, salaries, and bonuses + Corporate profits + Interest and investment income + Farm income + income from unincorporated businesses – Depreciation of assets – (indirect taxes – tax subsidies) = GDP

Indirect taxes are those collected by intermediaries and then paid to the government, such as sales taxes. Tax subsidies include the various tax credits and deductions people and businesses can claim on their income taxes.

The benefit of this approach is that it can be easier to measure income than production. It stands to reason that the amount of income in an economy will be similar to its economic output because that output is what produces the income.

The drawback of this approach is that it fails to account for savings and investment. Also, income does not always perfectly correlate with production. For example, productivity at a factory can rise without workers seeing an increase in their incomes.


How GDP Affects You

GDP is one of the economic indicators groups like the Bureau of Economic Analysis and the Organization for Economic Cooperation and Development (OECD) use to analyze economies. However, it may not be obvious how GDP can affect you.

The truth is, macroeconomics and measures like GDP can have a major impact on people’s day-to-day lives and well-being.

Interest Rates

One way GDP can impact people is in the interest rate market.

Countries usually have central banks or other organizations tasked with managing the economy — helping it to grow while avoiding high inflation and recessions. If GDP begins to rise quickly, inflation can become a risk, which can cause central banks to raise interest rates.

Those rate increases impact individuals by making borrowing and credit more expensive, such as with mortgages, auto loans, and credit cards.

If GDP falls, the central bank may take the opposite approach, lowering rates and making it cheaper to borrow, encouraging individuals to spend.

Investing

GDP is one of the most popular measures of an economy’s output. You can use it to see how an economy is growing over time.

Investors typically want to buy investments in companies that are experiencing increases in production, and therefore value. When GDP is growing, it’s easier for investors to find opportunities in that economy. When an economy’s GDP is falling, it can be a sign that companies in that economy are facing a difficult financial future.

Wages

Because GDP is a measure of economic output, it makes sense that wages would correlate with GDP. When production and output rise, workers should earn more. Similarly, wages might decrease when output also falls.

According to a study by the Economic Policy Institute, this was largely true for a long period of time. Between 1950 and 1980, productivity and wages increased similarly. Since 1980, productivity has increased while wages have not seen significant changes in real terms.

Unemployment

Modern economies rely on constant growth, with periods of shrinking GDP referred to as recessions. Typically, when GDP growth is strong, unemployment falls. Recessions can lead to significant amounts of unemployment as employers lay off workers or go out of business.

According to data from Pew Research, recessions directly lead to rising unemployment, with the 1990-1991 recession causing unemployment to rise from just under 6% to about 8%. Similarly, the Great Recession of 2007-2009 caused unemployment to rise from just over 4% to a high of nearly 10%.

As GDP began to grow again after these recessions, employment began to rise.


Criticisms of GDP

GDP is a useful economic measure used by organizations like the World Bank, International Monetary Fund (IMF), United Nations, and economists across the world. However, that doesn’t mean GDP is a perfect measure of the economy. There are many criticisms of GDP and situations where using GDP data to make decisions might not be a good idea.

These important economic factors are overlooked in traditional measurements of GDP:

  • Recessionary Hangovers. By definition, a recession ends when an economy’s GDP begins to rise after a period of decreasing. However, even when a recession technically ends, it can take years before the economy returns to its pre-recession level. For example, despite the Great Recession’s end in 2009, it took nearly a decade for unemployment to return to pre-recession levels.
  • Impacts of Credit. Not all spending in an economy comes from the income it generates. Individuals, corporations, and governments borrow money to spend on goods and services. The costs and impacts of this debt are not fully accounted for in GDP even though they can have massive impacts on an economy.
  • The Underground Economy. For many reasons, economic activity can occur outside of the usual channels, making it hard to track. The sale of illegal goods, for example, is rarely tracked and included in GDP even though those are technically goods produced by an economy. Similarly, someone working under the table or without an officially incorporated business might not report their income or sales, causing that production to be excluded from GDP.
  • Bartering. Related to the underground economy, some economic activity relies on bartering or the exchange of valuables other than cash. This type of activity usually doesn’t show up in GDP even though it can play a significant role in an economy, especially in the middle of a recession.
  • Unpaid Work. Many people perform valuable work, such as caring for children or older relatives, without any compensation. This work produces immense value but isn’t counted in GDP calculations.
  • Sustainability. GDP is purely a measure of economic production. It does not account for damage to the local environment or whether actions that are causing growth now will cause the economy to shrink in the long run. Nations that raze their forests, strip-mine their land, and build factories that pollute the air can see major GDP growth, but will likely find that growth unsustainable as they drain or degrade the natural resources that are available.

Gross Domestic Product FAQs

What’s the Difference Between GDP vs. GNP vs. GNI?

Gross domestic product (GDP), gross national product (GNP), and gross national income (GNI) are all macroeconomic measures that look at slightly different things.

GNP adjusts GDP for net income earned from outside the country’s borders. For example, if some of the income produced by a multinational organization within a country is sent to another nation, it is subtracted from GNP even though it is included in GDP.

GNI measures all of a nation’s income, including income earned by its residents and businesses including all income from foreign sources. It includes income its residents earn while abroad but excludes income earned by foreign residents within its borders.

Does GDP Include Inflation?

GDP measures the value of an economy’s output based on current values. That means changes in inflation impact GDP. If inflation makes goods cost more, those higher prices will cause GDP to rise.

Real GDP is a measure of GDP that adjusts for inflation, calculating the value of goods and services at a set monetary value. This measure is more useful for measuring GDP changes over time because it removes the rise in GDP caused by inflation.

What Does GDP Not Measure?

One of the criticisms of GDP is that it fails to measure many important aspects of economic activity.

One major factor GDP excludes is the underground economy, which includes everything from the sale of illegal goods and services to unreported cash transactions and barter transactions.

GDP is also limited in that it is solely an economic measure. GDP doesn’t account for important quality-of-life measurements like the availability of quality health care and education, equality, opportunity, or the environment.

This limitation has led to other measures that provide a more complete look at people’s well-being. For example, Bhutan’s government has designed the concept of Gross National Happiness, which tries to account for economic development alongside sustainability, environmentalism, preservation and promotion of culture, and good governance.

What Countries Have the Highest GDP?

There are multiple types of GDP, including nominal GDP, GDP per capita, and GDP PPP, which all measure slightly different things.

According to the World Bank, in terms of nominal GDP, which simply measures economic output, the top three countries are:

  1. United States ($20.953 trillion)
  2. China ($14.722 trillion)
  3. Japan ($5.057 trillion)

For GDP per capita, a measure of output compared to population, the top three are:

  1. Liechtenstein ($175,813 per capita)
  2. Monaco ($173,688 per capita)
  3. Luxembourg ($116,014 per capita)

For GDP PPP, which measures output while controlling for the purchasing power and cost of goods in different currencies, the top three are:

  1. China ($24.283 trillion)
  2. United States ($20.953 trillion)
  3. India ($8.975 trillion)

Final Word

GDP is a popular macroeconomic measure that tries to calculate the total value of an economy’s outputs. Despite its popularity, there are limits to GDP, and each different way of calculating it has pros and cons.

GDP can have some impacts on people’s everyday lives. Generally, financial times are good when GDP is growing and bad when it’s falling. Most people can feel satisfied understanding that simple fact and leave the more complicated measures and implications of GDP to central bankers and economists.

There are plenty of other economic indicators and measures that have a more direct impact on people’s lives. For example, the Consumer Price Index (CPI) is a measure of inflation and how it impacts the price of goods people buy regularly.

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TJ is a Boston-based writer who focuses on credit cards, credit, and bank accounts. When he’s not writing about all things personal finance, he enjoys cooking, esports, soccer, hockey, and games of the video and board varieties.

Source: moneycrashers.com

Gross Domestic Product (GDP) – Definition of This Economic Measure

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Additional Resources

Gross domestic product (GDP) is one of the most commonly used measures of economic production in the world. Despite its popularity, many people don’t know exactly what GDP is, how to calculate it, or how it affects you.

Put simply, GDP is the total value of everything produced by an economy, typically a country, over a period, typically one year. This allows economists to compare the size of different economies. In general, the higher a country’s GDP, the stronger its economy.

GDP can be important for everyday people for a number of reasons.


What Is Gross Domestic Product (GDP)?

GDP is a measure of the total market value of everything an economy produces. That includes both physical goods as well as intellectual property and services produced by an economy. GDP is typically measured over the course of a quarter or year and based on political borders, such as for countries or states.


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You can think of GDP as being like a report card or scoreboard for the health of an economy. If a country’s GDP is rising, it means its economy is becoming more productive. If GDP is shrinking, its economy is becoming less productive. You can compare the size of two countries’ GDP to compare the output of their economies.

There are multiple ways to calculate GDP but they all aim to produce a similar result: a measure of the size of an economy.


Factors That Affect GDP

Because GDP measures the size of a country’s economy, it is influenced by numerous economic factors.

GDP is the sum of the market value of everything an economy produces. The more valuable goods and services an economy produces, the higher its GDP will be. Keep in mind, GDP is a measure of the current value of goods and services. If inflation causes prices to rise, a country’s GDP will also rise because goods are more expensive.

The primary way economists determine the value of goods produced by an economy is to add all government spending, personal consumption, private investing, and net exports. 

The more the government spends, the more private businesses and people invest, and the more consumers spend, the higher a country’s GDP will be. Exporting more than it imports will also increase a country’s GDP, whereas importing more than it exports will reduce its GDP.


Types of Gross Domestic Product

GDP is used in multiple different contexts. Economists have designed different types of GDP to help them measure different aspects of the economy.

Nominal GDP

Nominal GDP is one of the most common measures of gross domestic product. It is the value of all goods and services an economy produces using current prices, unadjusted for inflation. This means it is less useful for comparing the same economy across different years because inflation can cause GDP to rise due to price increases, even if an economy’s output does not change. 

However, it is useful for measuring output in current terms and is often the simplest to calculate because you don’t have to adjust for inflation.

Real GDP

Real GDP is an inflation-adjusted measure of gross domestic product. It measures the output of an economy using constant prices.

For example, imagine an economy that produces $1,000 worth of goods in a year. The next year, it produces the exact same goods, but those goods sell for $1,050 because inflation for the year is 5%. 

The real GDP in both years will be the same because real GDP adjusts for inflation using the value of the economy’s currency in the base year to determine the GDP for future years.

For real GDP to increase, the output of an economy must increase rather than prices increasing due to inflation.

This makes real GDP useful for comparing changes in the same economy over time or comparing growth in different countries’ GDPs over time.

GDP Per Capita

GDP per capita is a measure of economic production per population. GDP per capita can be expressed in multiple forms, including nominal, real, and purchasing power parity.

Determining GDP per capita requires calculating an economy’s GDP then dividing it by the economy’s population.

For example, if an economy has a GDP of $10 million and a population of 2,000 people, its GDP per capita is: $10 million ÷ 2,000 = $5,000 per capita.

GDP Growth Rate

GDP growth rate measures economic growth over time. Usually, economists measure this on a quarterly or annual basis. This is typically expressed as a percentage rate.

For example, if an economy’s GDP is $10 million in one year and $10.5 million the next, its GDP growth rate is 5%.

GDP growth rate is a popular measure for economists for a few reasons. One is that it can help economists see the speed of an economy’s expansion or contraction. An economy that is growing too quickly may lead to inflation and prompt central banks to raise interest rates. If growth slows, the economy might be heading toward recession, prompting policymakers to attempt to bolster the economy.

A negative GDP growth rate indicates an economy that is shrinking or in recession.

GDP Purchasing Power Parity (PPP)

Purchasing power parity is a measure of the different standards of living between economies. It analyzes the price of a “basket of goods” that contains different common products and services people purchase. Higher PPP indicates a more powerful currency that can purchase more goods or a higher standard of living.

GDP PPP adjusts an economy’s GDP for exchange rates and the purchasing power of its currency compared to other currencies, letting economists compare the output of an economy to its cost of living.


How GDP Is Calculated

There are multiple different ways to calculate GDP but they all aim to measure an economy’s output. Each formula tries to account for the same factors, just in different ways. 

There are three methods economists use to calculate economic activity and determine GDP.

Expenditure Approach

The expenditure approach looks to determine the GDP of an economy by finding the total of all spending in that economy. The idea is that all of an economy’s outputs are purchased by someone, so finding out how much money is spent by individuals, businesses, and the government will tell you the value of all the goods an economy produces during a period of time.

To find GDP using the expenditure approach, you can use this formula:

Consumption + Investment + Government Exports + Net Exports = GDP

Consumption refers to consumer spending on items like food, rent, gas, clothing, and any other goods and services that they might need. It does not include capital investments like equipment, machinery, or real estate.

Investment is the portion of the calculation that accounts for investment in equipment, land, machinery, and the like by both individuals and businesses. It doesn’t include investment in financial products like stocks, bonds, or mutual funds.

Government spending is the aggregate of all the money the government spends on goods and services, including government employee pay, military spending, and infrastructure. Things like Social Security benefits aren’t included because they are transfer payments — a reallocation of money from one group to another. Unemployment, subsidies, and welfare are similarly excluded.

Finally, net exports measures the value of all goods an economy exports minus the value of the goods it imports. A country that exports more than it imports will have a positive value for net exports, whereas one that imports more will have to subtract the difference when finding its GDP.

The drawback of the expenditure approach is that it ignores some forms of investment, such as putting money in savings accounts or buying stocks. It also values goods and services at the price the purchaser pays, even if they pay a heavily discounted price below the true value of that good or service or an inflated price above its true value.

Production (Output) Approach

The production, or output, approach to calculating GDP uses the value of all the final goods that an economy produces. Here’s how this method of calculating GDP looks:

Gross Value Added – Intermediate Consumption = Value of Output (GDP)

  • Gross Value Added. How much value different economic activities add to goods and services.
  • Intermediate Consumption. The cost of the supplies and labor used to produce finished goods and services.
  • Value of Output. This calculation gives you the GDP of an economy by subtracting intermediate consumption from the gross value of an economy.

The drawback of using this approach is that it is nearly impossible to determine the true amount of production in an economy or the true value of that production. Some services are difficult to measure monetarily and may not wind up in the calculation, even though they have a major impact on the economy.

For example, someone who babysits children for a family probably won’t show up in this calculation. However, their babysitting lets the parents go out and spend money at restaurants, movie theaters, or other businesses.

People who produce goods at home, especially those who don’t sell them, also won’t have their production included, even though goods like home-grown vegetables have real value that should be included in GDP.

Finally, this method fails to account for the underground economy, which is not reported to the government. Services performed under the table — those done outside of the formal economy through barter or cash payments that aren’t reported to tax authorities — are excluded even though they add value to the economy.

Income Approach

The income approach to determining GDP looks at all the money individuals and businesses in an economy earn. To find GDP using this method, you can use the following formula:

Wages, salaries, and bonuses + Corporate profits + Interest and investment income + Farm income + income from unincorporated businesses – Depreciation of assets – (indirect taxes – tax subsidies) = GDP

Indirect taxes are those collected by intermediaries and then paid to the government, such as sales taxes. Tax subsidies include the various tax credits and deductions people and businesses can claim on their income taxes.

The benefit of this approach is that it can be easier to measure income than production. It stands to reason that the amount of income in an economy will be similar to its economic output because that output is what produces the income.

The drawback of this approach is that it fails to account for savings and investment. Also, income does not always perfectly correlate with production. For example, productivity at a factory can rise without workers seeing an increase in their incomes.


How GDP Affects You

GDP is one of the economic indicators groups like the Bureau of Economic Analysis and the Organization for Economic Cooperation and Development (OECD) use to analyze economies. However, it may not be obvious how GDP can affect you.

The truth is, macroeconomics and measures like GDP can have a major impact on people’s day-to-day lives and well-being.

Interest Rates

One way GDP can impact people is in the interest rate market.

Countries usually have central banks or other organizations tasked with managing the economy — helping it to grow while avoiding high inflation and recessions. If GDP begins to rise quickly, inflation can become a risk, which can cause central banks to raise interest rates.

Those rate increases impact individuals by making borrowing and credit more expensive, such as with mortgages, auto loans, and credit cards.

If GDP falls, the central bank may take the opposite approach, lowering rates and making it cheaper to borrow, encouraging individuals to spend.

Investing

GDP is one of the most popular measures of an economy’s output. You can use it to see how an economy is growing over time.

Investors typically want to buy investments in companies that are experiencing increases in production, and therefore value. When GDP is growing, it’s easier for investors to find opportunities in that economy. When an economy’s GDP is falling, it can be a sign that companies in that economy are facing a difficult financial future.

Wages

Because GDP is a measure of economic output, it makes sense that wages would correlate with GDP. When production and output rise, workers should earn more. Similarly, wages might decrease when output also falls.

According to a study by the Economic Policy Institute, this was largely true for a long period of time. Between 1950 and 1980, productivity and wages increased similarly. Since 1980, productivity has increased while wages have not seen significant changes in real terms.

Unemployment

Modern economies rely on constant growth, with periods of shrinking GDP referred to as recessions. Typically, when GDP growth is strong, unemployment falls. Recessions can lead to significant amounts of unemployment as employers lay off workers or go out of business.

According to data from Pew Research, recessions directly lead to rising unemployment, with the 1990-1991 recession causing unemployment to rise from just under 6% to about 8%. Similarly, the Great Recession of 2007-2009 caused unemployment to rise from just over 4% to a high of nearly 10%.

As GDP began to grow again after these recessions, employment began to rise.


Criticisms of GDP

GDP is a useful economic measure used by organizations like the World Bank, International Monetary Fund (IMF), United Nations, and economists across the world. However, that doesn’t mean GDP is a perfect measure of the economy. There are many criticisms of GDP and situations where using GDP data to make decisions might not be a good idea.

These important economic factors are overlooked in traditional measurements of GDP:

  • Recessionary Hangovers. By definition, a recession ends when an economy’s GDP begins to rise after a period of decreasing. However, even when a recession technically ends, it can take years before the economy returns to its pre-recession level. For example, despite the Great Recession’s end in 2009, it took nearly a decade for unemployment to return to pre-recession levels.
  • Impacts of Credit. Not all spending in an economy comes from the income it generates. Individuals, corporations, and governments borrow money to spend on goods and services. The costs and impacts of this debt are not fully accounted for in GDP even though they can have massive impacts on an economy.
  • The Underground Economy. For many reasons, economic activity can occur outside of the usual channels, making it hard to track. The sale of illegal goods, for example, is rarely tracked and included in GDP even though those are technically goods produced by an economy. Similarly, someone working under the table or without an officially incorporated business might not report their income or sales, causing that production to be excluded from GDP.
  • Bartering. Related to the underground economy, some economic activity relies on bartering or the exchange of valuables other than cash. This type of activity usually doesn’t show up in GDP even though it can play a significant role in an economy, especially in the middle of a recession.
  • Unpaid Work. Many people perform valuable work, such as caring for children or older relatives, without any compensation. This work produces immense value but isn’t counted in GDP calculations.
  • Sustainability. GDP is purely a measure of economic production. It does not account for damage to the local environment or whether actions that are causing growth now will cause the economy to shrink in the long run. Nations that raze their forests, strip-mine their land, and build factories that pollute the air can see major GDP growth, but will likely find that growth unsustainable as they drain or degrade the natural resources that are available.

Gross Domestic Product FAQs

What’s the Difference Between GDP vs. GNP vs. GNI?

Gross domestic product (GDP), gross national product (GNP), and gross national income (GNI) are all macroeconomic measures that look at slightly different things.

GNP adjusts GDP for net income earned from outside the country’s borders. For example, if some of the income produced by a multinational organization within a country is sent to another nation, it is subtracted from GNP even though it is included in GDP.

GNI measures all of a nation’s income, including income earned by its residents and businesses including all income from foreign sources. It includes income its residents earn while abroad but excludes income earned by foreign residents within its borders.

Does GDP Include Inflation?

GDP measures the value of an economy’s output based on current values. That means changes in inflation impact GDP. If inflation makes goods cost more, those higher prices will cause GDP to rise.

Real GDP is a measure of GDP that adjusts for inflation, calculating the value of goods and services at a set monetary value. This measure is more useful for measuring GDP changes over time because it removes the rise in GDP caused by inflation.

What Does GDP Not Measure?

One of the criticisms of GDP is that it fails to measure many important aspects of economic activity.

One major factor GDP excludes is the underground economy, which includes everything from the sale of illegal goods and services to unreported cash transactions and barter transactions.

GDP is also limited in that it is solely an economic measure. GDP doesn’t account for important quality-of-life measurements like the availability of quality health care and education, equality, opportunity, or the environment.

This limitation has led to other measures that provide a more complete look at people’s well-being. For example, Bhutan’s government has designed the concept of Gross National Happiness, which tries to account for economic development alongside sustainability, environmentalism, preservation and promotion of culture, and good governance.

What Countries Have the Highest GDP?

There are multiple types of GDP, including nominal GDP, GDP per capita, and GDP PPP, which all measure slightly different things.

According to the World Bank, in terms of nominal GDP, which simply measures economic output, the top three countries are:

  1. United States ($20.953 trillion)
  2. China ($14.722 trillion)
  3. Japan ($5.057 trillion)

For GDP per capita, a measure of output compared to population, the top three are:

  1. Liechtenstein ($175,813 per capita)
  2. Monaco ($173,688 per capita)
  3. Luxembourg ($116,014 per capita)

For GDP PPP, which measures output while controlling for the purchasing power and cost of goods in different currencies, the top three are:

  1. China ($24.283 trillion)
  2. United States ($20.953 trillion)
  3. India ($8.975 trillion)

Final Word

GDP is a popular macroeconomic measure that tries to calculate the total value of an economy’s outputs. Despite its popularity, there are limits to GDP, and each different way of calculating it has pros and cons.

GDP can have some impacts on people’s everyday lives. Generally, financial times are good when GDP is growing and bad when it’s falling. Most people can feel satisfied understanding that simple fact and leave the more complicated measures and implications of GDP to central bankers and economists.

There are plenty of other economic indicators and measures that have a more direct impact on people’s lives. For example, the Consumer Price Index (CPI) is a measure of inflation and how it impacts the price of goods people buy regularly.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

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TJ is a Boston-based writer who focuses on credit cards, credit, and bank accounts. When he’s not writing about all things personal finance, he enjoys cooking, esports, soccer, hockey, and games of the video and board varieties.

Source: moneycrashers.com

How to Use Stress to Create a Happy and Relaxed Retirement

Stress free woman with computer and many obligations
REDPIXEL.PL / Shutterstock.com

This story originally appeared on NewRetirement.com.

Less than 50% of people have a written retirement plan. The majority of people simply don’t have enough saved for this time in their lives. And, even if you have significant assets, retirement is a massive lifestyle change and a huge financial responsibility. Thinking about retirement can be stressful.

However, there is actually a way to use stress to your advantage — read on for tips.

Stress can actually be beneficial

Dean Drobot / Shutterstock.com

It goes without saying that stress is no fun — especially if you don’t know how to do it right.

Psychology suggests that there are good reasons for stress and good ways to use stress to your advantage.

Emotions, even negative emotions, have a purpose in our lives. Envy can help drive you toward goals. Anger can enable you to prevent exploitation. Stress, anxiety and worry can help you exert caution and discipline.

Before you retire, you need to have exerted major discipline to have saved adequately. And, you need to be cautious and plan very carefully before you move forward.

Use stress to your advantage when planning your retirement!

Fight or flight — the most common reaction to stress

Worried man
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Even though stress, anxiety and worry can be positive, most of us have a negative — not very productive — reaction to stress.

When we feel stress, our body is pumping chemicals into our bloodstream and those chemicals typically drive us to fight or flight:

  • We fight to try to extinguish the perceived foe.
  • We fly to get as far away from the threat as possible.

Fight and flight can be awesome defenses against immediate threats. Our brains developed the fight or flight reaction to protect us from real dangers like snakes hiding in the grass, a leopard leaping at us from trees, and other wild dangers.

However, fight and flight aren’t great reactions to things like retirement planning.

How many of us “fly away” – avoid, procrastinate, ignore – our retirement planning needs?

Following are four more positive and effective ways to deal with retirement planning stress.

1. Stress does not need to be harmful

Baby boomer friends in a kitchen
Dmytro Zinkevych / Shutterstock.com

Stress is only harmful to you if you believe that it is harmful to you.

Kelly McGonigal is a psychologist and lecturer at Stanford University. In her Ted Talk, she teaches us that you can eliminate the harmful impact of stress.

Yes, stress can be extremely damaging. A University of Wisconsin study found that stress can increase your risk of dying by 43%. And, McGonigal estimates that believing stress is bad for you might be “…the fifteenth-leading cause of death in the United States.”

However, research abounds that you can eliminate the harmful effects of stress. One study from the University of Buffalo found that you can reduce or even eliminate the damaging aspect of stress by spending time helping loved ones, friends or neighbors. “When you choose to connect with others under stress, you can create resilience,” McGonigal said.

If you are stressed about finances and retirement, try reaching out to friends and family to talk about it. Offer them your best tips and commiserate and problem-solve.

If you’re not comfortable talking about finances with people you know, join a Facebook group or talk with a financial adviser.

2. Change your perception of stress

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University of Rochester psychologist Jeremy Jamieson has proven that the mere belief that stress can be useful can, in fact, improve your outcomes.

In one experiment, a group of students was preparing for an exam.

  • Jamieson told one group that stress can help you rise to the occasion of the test.
  • He told the other group to just focus if they get stressed out.

The group who were simply told that stress is enhancing did significantly better on that test and subsequent tests than the group that was told to focus.

Your mindset can actually impact how stress impacts you. Stress can increase your productivity.

Stressed about finances? Remind yourself that the stress is there for a reason and let it help you deal with the issues.

Stress can help you get started tackling your retirement plans.

3. Acknowledge your stress

Woman with e-reader and coffee
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Too often, we don’t actually acknowledge big long-term stressors like retirement. Retirement is an abstract concept in that it’s hard to think about in concrete terms.

However, your future financial security is probably gnawing at you.

If you can acknowledge and label any stress you feel, then your brain activity will actually shift and go to work dealing with it.

Researcher Matt Lieberman used brain scans to illustrate how recognizing stress can make you more reactive tackling problems.

In one study, participants were shown negative images. When they were asked to acknowledge and label the emotions they felt when viewing the picture, the activity in their brains moved from the emotional part of the brain to the prefrontal cortex — the area where we consciously think and plan.

4. Start small

couple using a budget app
mavo / Shutterstock.com

Planning retirement is indeed a massive task. You are trying to account for the next 20 to 30 years of your life with various unknowns and a finite set of resources.

Even so, one study found that people spend more time researching and buying a television than they spend on retirement planning. This certainly sounds like a “flight response” to the overwhelming stress of long term planning.

One way to deal with retirement planning stress is to start small.

You don’t need to tackle everything all at one time. You can break down the task into manageable chunks.

The NewRetirement retirement planning system is ideal for this. The tool is the most detailed and personalized online. It saves your information and allows you to plan at your own pace.

  • Start by documenting the broad outlines of your current finances.
  • See where you stand now.
  • Discover ways to strengthen your financial future.
    • Figure out the ideal time to start Social Security.
    • How much savings do you need? Don’t have enough? What if you delay your retirement date or plan to spend less?
    • What is your withdrawal strategy?
    • Will you have an estate? Is it as valuable as you’d like it to be?
    • And more …

Get started today. And then, keep adding to your plan.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

5 First-Rate Retail Stocks the Pros Love

It hasn’t exactly been smooth sailing for retail stocks so far in 2022 – but a comeback could be in the cards.

True, retailers have continued to feel the heat of the macroeconomic headwinds, including inflation and supply-chain disruptions. And rising commodity prices due to the conflict between Russia and Ukraine only adds to the industry’s woes.

This slowdown is seen in the U.S. Census Bureau’s monthly retail sales report, which ticked up marginally (by 0.3%) in February when compared to January’s figures. 

But on a year-over-year basis, retail sales in February were actually up 17.6%. And the National Retail Federation (NRF) projects retail sales this year will grow in the range between 6% and 8%, even in the face of broader headwinds.

“Despite all that’s been thrown at them including inflation, supply-chain constraints, market volatility and significant geopolitical events, consumers remain able and willing to spend,” Matthew Shay, CEO of the National Retail Federation, said.

Underscoring this is data from the Bank of America Institute, which showed credit and debit card spending was up 11% year-over-year in March. 

And despite surging food and energy prices, consumers’ “balance sheets appear strong enough to weather the storm, provided it doesn’t persist too long,” says David Tinsley, senior economist for the Bank of America Institute. 

In this scenario, should investors consider retail stocks? Wall Street analysts seem to say yes. 

Using the TipRanks database, we have shortlisted five retail stocks that are heavily favored by their covering analysts. What’s more, each offers significant upside potential to current levels based on their consensus price targets.

Data is as of April 5. TipRanks consensus price targets and ratings are based on analyst opinions issued over the past three months. Stocks listed in reverse order of consensus rating, and then 12-month price targets.

1 of 5

The RealReal

Woman sitting in luxurious bedroom shopping on tabletWoman sitting in luxurious bedroom shopping on tablet
  • Market value: $728.6 million
  • TipRanks consensus price target: $14.14 (80.6% upside potential)
  • TipRanks consensus rating: Moderate Buy

The RealReal (REAL, $7.83) is an online marketplace for authenticated, resale luxury goods that currently has more than 24 million members. Shares of the company have taken a beating alongside other retail stocks this year, down 32.6% for the year-to-date.

At its Investor Day in late March, the luxury goods retailer announced its Vision 2025 financial targets.

“As we previously committed, we are targeting positive adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] for full year 2024, based on strong top-line growth, operational excellence and fixed-cost management,” said Robert Julian, chief financial officer of The RealReal, in a press release preceding the event. “Our Vision 2025 for The RealReal is $5+ billion of gross merchandise value (GMV), $1.5+ billion of total revenue and $100+ million of positive adjusted EBITDA.”

Management expects REAL to be profitable on an adjusted EBITDA basis in 2024 due to three main assumptions: “Continued annual top-line growth of at least 30%, operational excellence with improved variable cost productivity; and number three, controlling our fixed costs and leveraging our prior investments in technology and stores.”

BTIG analyst Marvin Fong came away optimistic about the luxury stock following the Investor Day as the company provided “investors with a clearer financial model” and gave him “incrementally more confidence in the path to breakeven.”

Elaborating further, the analyst pointed out that REAL’s fixed costs are set to rise due to a new distribution facility in Arizona, expansion of its retail stores, and investment in people and technology.

Fong thinks that these investments should result in enhancing business efficiency. And even if “inflation drives up its fixed costs above target, it will also likely help pricing on consigned goods, making inflation relatively neutral to the business.”

As a result, the analyst has rated the stock a Buy with a price target of $12.

Of the 14 analysts who have sounded off on REAL stock over the past three months, nine are in the bull camp, according to TipRanks. TipRanks offers up a full analyst rundown of REAL shares.

2 of 5

Amazon.com

An Amazon delivery boxAn Amazon delivery box
  • Market value: $1.7 trillion
  • TipRanks consensus price target: $4,143.76 (26.3% upside potential)
  • TipRanks consensus rating: Strong Buy

Amazon.com (AMZN, $3,281.10) has been a beacon of light among retail stocks of late. Shares are up 12.6% in the past month after the e-commerce giant’s board of directors approved a 20-for-1 stock split. AMZN also authorized a stock buyback of up to $10 billion of the company’s shares.

This news came even as AMZN investors have been wondering about whether macroeconomic headwinds will weigh on the company’s first quarter. But Guggenheim analyst Seth Sigman has some reassuring news on that front.

The analyst states that AMZN “may be better positioned to navigate macro factors.” Elaborating further, Sigman points out that after monitoring key trends like customer income so far in Q1, “AMZN’s high-income consumer seems to have stabilized after slowing last year, while its lower income customer has started to moderate, but AMZN is outperforming relative to the broader competitive set that we track.”

Sigman also noted other positives for the stock, including the e-commerce company’s improving market share across different categories and growth in the frequency of customers’ purchases.

While the analyst is bullish on the stock with a Buy rating, Sigman believes that the timing of Amazon’s Prime Day “will be a key variable” in the second and third calendar quarter. Sigman’s above-consensus $4,300 price target anticipates AMZN shares returning 31% from current prices.

Wall Street is plenty bullish in general, with 34 of 35 covering analysts issuing Buy calls on AMZN over the past three months. See which other analysts are in the Amazon Buy camp on TipRanks.

3 of 5

Home Depot

Home Depot buildingHome Depot building
  • Market value: $315.0 billion
  • TipRanks consensus price target: $382.56 (25.5% upside potential)
  • TipRanks consensus rating: Strong Buy

Shares of Home Depot (HD, $304.86) have seen a widespread sell-off and are down 26.5% for the year-to-date. This is even as the Dow Jones stock delivered better-than-expected fourth-quarter results. But it seems the company’s fiscal outlook disappointed investors.

Home Depot’s management expects sales and comparable sales growth to be “slightly positive” this fiscal year, while operating margin is projected to be flat. In addition, earnings growth is anticipated to be in the low single digits.

But Morgan Stanley analyst Simeon Gutman thinks that this underwhelming outlook for fiscal 2022 is fueled by macroeconomic uncertainties rather than a reflection of HD’s business. The analyst came away upbeat about the stock following a meeting with the home improvement retailer’s management, including new CEO Ted Decker.

Gutman is reassured by the management’s confidence in HD’s medium- and long-term growth outlook. “The structural outlook for home improvement is bullish, HD is primed to take share and win with the Pro, and One HD investments are on the cusp of paying off,” he adds.

Gutman has an Outperform (Buy) rating on the stock and a price target of $380.

Most analysts on the Street share this optimism, with HD one of the Strong Buy-rated retail stocks in the TipRanks universe. Of the 21 analysts surveyed by TipRanks, 17 categorize Home Depot stock as a Buy. Check out their complete price targets and analysis.

4 of 5

Lowe’s

Lowe's storeLowe's store
  • Market value: $135.5 billion
  • TipRanks consensus price target: $275.77 (34.6% upside potential)
  • TipRanks consensus rating: Strong Buy

Lowe’s (LOW, $204.87) is the second home improvement name on this list of retail stocks.Shares of the value stock are off 20.7% year-to-date, even as the retailer delivered strong Q4 results. Investors seem to be concerned with macroeconomic conditions such as the rising inflation impacting the company’s optimistic fiscal 2022 outlook.

Management stated on its fourth-quarter earnings call that it was raising its sales outlook for FY22 and expects it to range between $97 billion and $99 billion, with comparable sales likely to go down 1% or up 1%. But Lowe’s cautioned that this outlook assumes “lumber pricing will return to a more normalized level in the second half of the year.”

So, how is LOW’s optimistic outlook materializing so far? 

For Evercore analyst Greg Melich, his econometric model – the Home Improvement Lead Indicator (HILI) – seems to indicate that the home improvement market remains strong, “despite headwinds from increasing rates and falling sentiment.”

Melich adds that the home improvement spending per occupied home is “above average, yet remains well below prior peaks.”

For the analyst, LOW remains his “preferred stock to play these trends.” He is bullish with a Buy rating and a price target of $255.

However, Gordon Haskett analyst Chuck Grom has a different take. While reiterating a Buy on the stock, the analyst lowered the price target to $255 from $285 as he remained concerned about the recent traffic trends in the month of March. Combined with rising interest rates, particularly on mortgage loans for 30 years, premium valuations for home improvement retailers seem “harder to justify,” according to Grom.

Grom and Melich are among 13 of 14 covering analysts who have said LOW stock is a Buy over the past three months. Check out Wall Street’s average, highest and lowest price targets for LOW on TipRanks.

5 of 5

Academy Sports and Outdoors

basketballs, soccer balls and backpacks on shelves at storebasketballs, soccer balls and backpacks on shelves at store
  • Market value: $3.3 billion
  • TipRanks consensus price target: $58.80 (54.2% upside potential)
  • TipRanks consensus rating: Strong Buy

Academy Sports and Outdoors (ASO, $38.14) is a sporting goods and outdoor recreation retailer in the U.S. Shares have been swept up in the sell-off among retail stocks and are down 13.1% year-to-date.

The consumer discretionary stock’s troubles on the charts come even as ASO delivered its highest sales and profits in the company’s history in fiscal 2021. For the full year, the retailer’s net sales rose 19.1% to a record $6.8 billion. 

Net income more than doubled to $671.4 million, making it the “the most profitable year in the company’s history,” according to its fiscal 2021 press release.

“For the second consecutive year, Academy delivered record financial results, driven by a dedicated, adaptable team, lasting operational improvements and strong consumer demand,” Michael Mullican, chief financial officer of Academy Sports and Outdoors, said.

For fiscal 2022, ASO expects net sales to range from $6.6 billion to $6.8 billion and adjusted earnings to arrive between $6.70 per share and $7.25 per share.

Following the company’s financial results, Stephens analyst Daniel Imbro maintained an Overweight (Buy) on the stock and raised the price target from $68 to $70. The analyst is upbeat about ASO’s Q4 results – which showed solid top- and bottom-line growth – and called it “another quarter of strong margin leverage.”

Imbro believes investor concerns over the sustainability of the company’s stellar financial results are overblown and thinks that the stock’s current valuation is “much too cheap for the opportunity here.”

The pros certainly agree that ASO is one of the best retail stocks out there. All five covering analysts surveyed by TipRanks that have sounded off over the past three months call the stock a Buy. Check out their price targets and analysis at TipRanks.

Source: kiplinger.com

8 Home Office Essentials You Need For Your Remote Job

Remote work is here to stay.

Some employers are willing to give hundreds, if not thousands, of dollars in stipends for their staff members to deck out their home office, while others might not be as in tune with what a true work-from-home situation looks like.

Most remote jobs are somewhere in the middle, but it’s likely that you’ll need to invest a little in your home office setup before it’s work-from-home ready.

So, in this remote world, here are some of the home office essentials and equipment you should at least consider purchasing for your home office space.

The Basic Home Office Essentials for Remote Jobs

1. Computer Setup

Portability is a large consideration for remote jobs. After all, half the fun of working at home is curling up on the couch with your laptop on those lazy days. In that case, a light laptop is your best option. But computer prices may make you feel a little queasy.

Spending nearly $2,000 on a McBook may not be feasible, even if you write it off on your taxes. That’s why work-from-home reporter James Duren sticks to the basics with his $170 Chromebook.

“The most beneficial aspect of it is that everything is stored in the cloud,” Duren said. “So I’m never at risk of losing documents in the event my laptop dies.”

This is a double-edged feature, however. The biggest adjustment may be the availability of apps and programs. The Chromebook is its own operating system, which means some popular applications aren’t available to download.

For jobs that require specific sales or IT software, an inexpensive PC with the latest Windows operating system may be the best choice.

2. High-Speed Internet

Besides a computer, the most common requirement for a work-from-home job is a steady, hard-wired internet connection. That means your laptop or computer must be able to directly connect to your modem with an ethernet cable — not through Wi-Fi.

Though you might be on Wi-Fi most of the time, a hard-wired connection is your backup when the network is on the skids and you have several video calls to make.

Typically, employers will require minimum upload and download speeds. Reviews.org recommends at least 50 Mbps download speed and 10 Mbps upload speed for working at home. Try Ookla’s internet speed test to see if your current connection meets that standard.

To find the best deal, there are many websites that compare internet providers based on speed, price and area of availability. According to an estimate by internet and phone service search engine WhistleOut, you will likely pay at least $20 a month to meet the minimum internet speed requirement for most work-from-home jobs. (WhistleOut is owned by Clearlink, which also owns The Penny Hoarder.)

But be sure to do some comparisons on your own to get a more accurate number, as your location may affect prices.

3. Desk

It would be pretty rare for a job listing to specifically require an office desk. It’s kind of a given.

But desks are sometimes overlooked. Realistically, the standard cubicle-sized desk doesn’t work for apartments or home offices. So it’s good to consider your space and storage limitations when shopping around.

“I believe the best purchase I ever made was a standing desk,” said Matt Schmidt, a remote insurance adviser. “Being able to go from a sitting desk to standing desk throughout the day was a lifesaver.” A standing desk can range anywhere from $60 to $400 on Amazon. It’s all about your preference and price limitations.

What about portability? “A $15 IKEA bed-tray is my go-to for working from the cozy comfort of my couch,” Brenneman said.

4. Office Chair

If there is one home office essential to splurge on, it’s the right office chair. Being uncomfortable is really distracting, and bad posture leads to a host of other long-term issues. Creature comforts are important when you’re sitting for hours at a time.

“One of the most important items for me personally is a comfortable and posture-support office chair,” said Nicholas Kinports, a remote business development executive. His go-to ergonomic chair is from Aeron. The cheapest model in this series goes for around $600, but Kinsport says it’s worth every penny.

For a more budget-friendly option, try the Alera Elusion Series Mesh Chair, which is available for as low as $111 on Amazon. According to ReviewGeek, it’s the best chair if you’re trying not to sell an arm and a leg to support your back.

The Extras – Other Home Office Essentials to Consider for Remote Jobs

5. Landline and Phone

If you’re in customer service or sales, a solid home-office phone is a godsend. You’ll typically need call forwarding, holding, conferencing and voicemail features in your day-to-day, which is pretty standard for most office phones. Amazon has a slew of models between $50 and $80. It’s probably overkill to spend more than that.

If you were hoping to skirt landline costs by using a Voice-over-IP (VoIP) service like Google Voice or your own cell phone, most employers in phone-reliant industries forbid it. They typically want a dedicated landline.

Landlines are becoming antiquated as VoIP services are taking over. Less than 32% of Americans have landlines now, according to Ooma, who also says  the average costs of a landline is $42 per month. If you already have a landline service, adding an additional line or bundling it with your current internet or cable provider may save you some cash, too.

6. Headset and Microphone

Headsets are frequently required, but even if the job listing doesn’t specify them, noise-canceling headphones can do wonders for productivity. And during meetings or video calls, you’ll probably need your hands free for note taking.

“For remote work, the most important tool is a good headset that allows me to comfortably attend meetings without the background noise of my neighborhood intruding,” remote content writer Arwen Brenneman said.

Several remote workers recommended their favorite pair of headphones and headsets to The Penny Hoarder. If you have the funds, software developer Austin Grandt recommends Bose QuietComfort headphones.

“The headphones are perfect for working at home or in a shared setting like a co-working space, as the noise-canceling puts me into my own zone,” Grandt said. “The built-in microphone on the cable of the headphones also works great for when you have to have video chats or phone calls.”

The Bose headset can range anywhere from $200 to $400 on Amazon, depending on the model. If you’re looking for a cheaper setup, Srhythm has a highly rated noise-reduction headset with a built-in microphone for around $50.

7. Dual Monitors

Computer screen monitor specs are usually contained to the IT, sales or customer service industries, but other professions, like writers and designers, find them beneficial as well.

“As a [software] developer, an extra screen is also a must,” said Grandt. “Something that is larger than the 13-inch laptop… keeps me productive.”

PC Magazine rated the best monitors of 2022, and Lenovo’s ThinkVision M14 received a great review. Its screen brightness and portability make it ideal for home-office use, and currently will set you about $250 at Wal-Mart. Consider adding a laptop stand or a monitor mount for an extra $30 or so.

8. Other Little Extras

Although they may not be considered “essential,” making your home office comfortable to work in every day may require a few more touches:

  • Office supplies. Think notepads, pens and paper clips.
  • Power strip. The more electronics you accumulate, the more you’ll appreciate extra outlets.
  • Good task lighting. Your eyes will thank you for it. Or simply find a spot next to the window for some nice natural light.
  • Warm home office decor. You don’t have to go overboard, but your home office should reflect your personality.
  • Storage space or an organizational system. Yes, you can be totally digital. But you still may want a place to store professional reference books or your coffee mug collection.

If you land a work-from-home gig that doesn’t cover costs on these home office essentials, be prepared to dish out $700 as a one-time investment to ensure your workspace is up to snuff. For the costlier options on the list, it could run you up to $2,500 — not including monthly internet, phone payments or pajamas.

And freelancers, be sure to write these expenses off as itemized deductions on your taxes.

Adam Hardy is former staff writer at The Penny Hoarder. Senior writer Robert Bruce contributed to this report.

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Source: thepennyhoarder.com

How to (Safely!) Take Risks at Work

We know that taking risks is the key to innovation. But playing is safe is just so… safe! If fear is holding you back from taking risks at work, Modern Mentor has some tips to share to help you contain and take risks without fear.

By

Rachel Cooke
March 7, 2022

discovery. When you take the time to really understand the context—to define an opportunity at hand—then your risk suddenly becomes a solution to a problem rather than a shiny object.

Years ago, my brother had aspirations of starting his own business. But talk about a risky move!
So, he took a job with a recruiting firm that placed technical talent within organizations. It turns out technical talent and jobs come in many shapes and sizes. And my brother quickly realized there was an opportunity to specialize in a very specific brand of technical. He pitched his boss, his boss wasn’t interested, so my brother went out on his own.
Ten years later, my brother is the go-to guy when it comes to the particular niche he chose.
By the time he started his business, it no longer felt like a risk—a thing he wanted to do. It became a solution to a problem—a thing he felt compelled to do. And the thing that moved him into the zone of confidence was context. 
Maybe you lead a marketing team and there’s a new campaign you’ve been wanting to launch. Or you run a retail store and you have an inventive merchandising vision. Or you manage the front desk at a medical practice, and you’d like to reinvent the way you connect with new patients.
Before you fall in love with your idea, start with context. What’s happening around you? What’s working well, what’s feeling clunky or missing? What do your customers or patients need that they aren’t presently getting?
Answer those questions before you begin envisioning the risk you’d like to take. This will force you to keep things practical and purposeful—risk-mitigating factors. 

2. Think big and shrink it

“Go big or go home” is one of those ideas that sounds great at the gym or on a bumper sticker. But personally, I’m not a fan.
Sometimes “think big but start small” is the way to go. 
I was still working for a big company back when the open-concept workspace became a trend. Suddenly all the big research firms were pitching the open office as a means of driving collaboration, creativity, and productivity.
Big companies ate the idea up, and suddenly cubicles and offices were tumbling down, and you couldn’t take two steps without banging a knee on a space-age sofa or a foosball table.
It felt like it happened overnight. The change was significant, the financial investments unthinkable. 
Turns out, it totally backfired. Suddenly people had nowhere to go and think or have a private conversation or get their heads-down work done. Everything became noise—a distraction. Productivity and collaboration were ultimately reduced and people started working from home more often.
These complete workspace overhauls were gargantuan efforts. But by the time their impact became clear, it was too late to turn back. 
Hindsight is 20/20, but if those companies had started by transforming just a single floor and had people work in it for a few months, they’d have learned early about the negative impacts, and could have reworked their plans.
They went too big too fast. And this is a lesson in thinking big but starting small.
So, what’s your big idea, and how can you shrink it down to a tiny test?
Can you mock up that marketing campaign and test it with just a handful of loyal customers to get their feedback? 
Shrinking your idea down to a test minimizes the risk. You haven’t climbed too high, so the fall—if you have one—is unlikely to hurt. You just get up and try again. And if your idea is a win, then you build it out from there.
Suddenly risk doesn’t seem so terrifying, right?

3. Have a learning plan

The real problem with the open-office debacle is that a decision got made, and success was the only option. There was no backup plan, no strategy to address the question of “what if this new design doesn’t deliver the results we need?”
The real issue wasn’t the idea, it was the lack of a plan that would unlock learning, pivoting, and reimagining along the way.
If you’re envisioning that new marketing campaign, you could develop the campaign, send it to your entire database, and cross your fingers.
Or you can determine which variables you’re going to test (email subject lines? Discounts and offers?), which customer segments you’re going to engage, and what metrics you’ll look at to provide insight.
In combination with your think-big-start-small strategy, your tiny test gives you feedback you can leverage as you go. Which subject line performed best with your test audience? That’s the one you send to the masses. And what is it about the subject lines that didn’t perform well that might inform your future campaigns?
When you take this approach you’re never failing. You’re either winning or you’re learning. And both of these outcomes are of service to you and your company.

4. Spread the word 

Taking that first risk—even small and planned—may still feel scary. But if you’re intentional, you’ll learn something essential that will move you forward.
Then you just need to do it again. And you need those around you doing the same until risk-taking becomes a habit ingrained in how you do business.
Telling stories is one of the greatest ways to begin to build a habit. Instead of preaching about the value of risk-taking, share your own story of what you did, what you learned, and what impact it delivered to the team or organization.
Stories make things real and memorable. They also set you up as the hero of your story. Position yourself as the ambassador of risk-taking and watch your star soar.